Powdr Sues Talisker over Park City Land Holdings

[VermontGranola]

Looks like a neighborhood dispute in Park City has boiled over!

http://www.supportpcmr.com/

Park City Mountain Resort Files Lawsuit To Protect Resort

Suit Against Canadian-Based Real Estate Developer Seeks to Preserve Jobs and Avert the Closure of the Resort

Park City, Utah (March 9, 2012) – Park City Mountain Resort today filed a lawsuit against Talisker Land Holdings, LLC. The suit seeks to resolve a dispute that threatens the future of one of the top resorts in North America and a major economic engine in Utah.

“After extensive and, sadly, unsuccessful negotiations, we reluctantly took the initiative to file this lawsuit,” said Jenni Smith, president and general manager of Park City Mountain Resort. “We need to protect the future of the company and our more than 1,200 employees, who bear a tremendous burden of uncertainty in this matter, and the many local businesses and homeowners in the Greater Park City area. We are seeking relief through the court, the only option left at our disposal.”

At issue is the continuing right to use land occupied by some of Park City Mountain Resort’s chairlifts and runs. On December 27, 2011 Talisker Land Holdings, LLC advised Park City Mountain Resort that it deemed that the Resort’s right to use the land expired, and that Park City Mountain Resort would need to vacate the premises unless the Resort entered in to a new agreement for the use of the land.

Principals of Park City Mountain Resort and Talisker met repeatedly in 2009, 2010 and 2011 to discuss multiple property transactions, business opportunities and infrastructure investments, including the future lift conncection between Park City Mountain Resort and Canyons Resort, a Talisker property. In the Summer of 2011, Park City Mountain Resort paid its annual fee for the use of the land, which was accepted by Talisker, and invested $7 million in infrastructure upgrades throughout the Resort.

“The growth and success of Park City Mountain Resort is 100 percent attributable to the investment, the hard work and dedication of our management and entire staff of 1,200 employees and more than 400 volunteers,” continued Smith. “We’re going to fight as long as it takes to keep Park City Mountain Resort locally owned and locally operated.”

According to a complaint filed in the Third Judicial District Court (Summit County), “plaintiffs sue the defendants to prevent them from interfering with the continued operation of the Resort and from attempting to shut the Resort down.”

About Park City Mountain Resort
Park City Mountain Resort, named the “#1 Family Vacation” by the editors of SKI Magazine, is located in the heart of Park City, Utah. The resort employs more than 1,200 staff and more than 400 volunteers.

[Bubba]

I wonder if there are any lifetime passes involved.

[VermontGranola]

Here is a great opportunity for Powdr to purchase land at the Canyons and tell Talisker to vacate the property. Regardless, more money will flow west to settle this mess.
http://www.parkrecord.com/ci_20242348/a ... up-auction

[rogman]

The TGR read on this is pretty entertaining, even if the facts are murky. Couple of obvious conclusions:

1. POWDR was incredibly stupid to put significant leasehold improvements into an area where they didn't have a long term lease. Unbelievable.
2. The settlement will involve something between slightly higher lease payments by POWDR to Talisker, to outright takeover of Park City by Talisker.
3. Talisker/Canyons would benefit from a merging the two areas, since it would give them an in-town presence.
4. There isn't huge downside for Talisker regardless of how this fight turns out. Worst case, receive higher rent. For POWDR, it could be catastrophic.
5. POWDR's lease situation is actually worse than the CNL/Boyne deal; At least with CNL (the owners of SR, and the Loaf), CNL is the one making the cap-ex improvements, not Boyne. POWDR is making improvements on property they don't own.
6. If all that is done is to extend the lease out another 10 or 20 years regardless of the rate, Park City won't see another lift, or any other structure that has a long term payback. Just doesn't make fiscal sense.
7. In my opinion, the best option for POWDR is either buy the land outright from Talisker; or go into a deal where they "sell" the resort to Talisker, and lease it back from them, aka the CNL/Boyne model. However, that gets dicey because they would still be competing with their owner. Thus buying is better, and if that level of investment is an issue, they can then flip it to CNL. However, unless the deal is particularly sweet, don't see why Talisker would sell.
8. It is my guess that this is having a big impact on the other POWDR resorts. They have probably been order to cut spending to the bone. For Killington, not even turning on the fan gun at the base of Superstar during the recent cold snap was stupid. They badly needed to stockpile more snow at the base.

[hillbangin]

Isn't Killington it's own corporation with its own books protected from the parent - to protect it from this kind of issue?

That mess will go on for years..........

Powdr's UT problems will affect Killington - but I doubt it's the reason they didn't make snow -

that was Irene and the new Deck..IMO

[Highway Star]

Talisker is going to crush POWDR. Sounds like they are making a play to interconnect all 7 resorts, making it the premier ski destination in north america. Kicking POWDR out and ticking off some of Park City is a blip compared to the long term upside.

That's what I would do at least.

[DrJeff]

Here is a great opportunity for Powdr to purchase land at the Canyons and tell Talisker to vacate the property. Regardless, more money will flow west to settle this mess.
http://www.parkrecord.com/ci_20242348/a ... up-auction

Apparently at the auction yesterday for the 1000 or so acres of land that comprises some of the Canyons in question here, Talisker was the only bidder and acquired the land for the auction start point price of 50 million

[Bubba]

The TGR read on this is pretty entertaining, even if the facts are murky. Couple of obvious conclusions:

1. POWDR was incredibly stupid...

Many statements about Powdr start this way

[Mister Moose]

Isn't Killington it's own corporation with its own books protected from the parent - to protect it from this kind of issue?

No child's allowance is ever protected from the parent's decisions.

[daytripper]

Isn't Killington it's own corporation with its own books protected from the parent - to protect it from this kind of issue?

That mess will go on for years..........

Powdr's UT problems will affect Killington - but I doubt it's the reason they didn't make snow -

that was Irene and the new Deck..IMO

The new deck is all the more reason to blow snow right in front and above it

[rogman]

What is the value of Park City without a valid lease? Does POWDR have outstanding loans related to the property? Could they end up owing money on a lift they no longer own or operate? I'm still baffled by the publicly available facts. If it actually goes to court, then POWDR is in trouble; it means Talisker isn't really interested in settling. Meanwhile, pass sales at Park City have probably tanked.

[Highway Star]

So, how could this play out?

- They settle on a new lease, PCMR pays more money
- Talisker locks PCMR out of the land. PCMR sells out to Talisker.
- Talisker locks PCMR out of the land. PCMR buys out land from Talisker. (with certain interconnect provisons?)

Thoughts?

[DrJeff]

What is the value of Park City without a valid lease? Does POWDR have outstanding loans related to the property? Could they end up owing money on a lift they no longer own or operate? I'm still baffled by the publicly available facts. If it actually goes to court, then POWDR is in trouble; it means Talisker isn't really interested in settling. Meanwhile, pass sales at Park City have probably tanked.

PCMR has been pretty conservative with lift replacement/expansion the last few years. Basically a new high speed quad a year for the last few years, a couple of snowcats here and there and some snowmaking upgrades. With a $96 dollar walkup rate ticket and a slew of texans ready and willing to pay, I gotta think that they're operating in a positive cash flow situation there. I know atleast the Tuesday early this month that I skied there with my family that there was a solid crowd there. Tough to tell if it was a bunch of day tickets or passes though as their day tickets and passes are complete RFID where you get a glorified credit card which you put in an outer pocket of your coat and when you head through the turnstile in the lift queue if your pass is valid, the turnstile opens. Or as my wife found out, if you put your day pass UNDER your cell phone, the turnstyle doesn't open and the liftie jokingly harasses you a bit

[biged]

What is the value of Park City without a valid lease? Does POWDR have outstanding loans related to the property? Could they end up owing money on a lift they no longer own or operate? I'm still baffled by the publicly available facts. If it actually goes to court, then POWDR is in trouble; it means Talisker isn't really interested in settling. Meanwhile, pass sales at Park City have probably tanked.

PCMR has been pretty conservative with lift replacement/expansion the last few years. Basically a new high speed quad a year for the last few years, a couple of snowcats here and there and some snowmaking upgrades. With a $96 dollar walkup rate ticket and a slew of texans ready and willing to pay, I gotta think that they're operating in a positive cash flow situation there. I know atleast the Tuesday early this month that I skied there with my family that there was a solid crowd there. Tough to tell if it was a bunch of day tickets or passes though as their day tickets and passes are complete RFID where you get a glorified credit card which you put in an outer pocket of your coat and when you head through the turnstile in the lift queue if your pass is valid, the turnstile opens. Or as my wife found out, if you put your day pass UNDER your cell phone, the turnstyle doesn't open and the liftie jokingly harasses you a bit

Didn't know that they don't have the scanning like at Killington. I wonder why? Maybe we don't want to know how many people actually get on the lift before 8:30am.

[Big Bob]

http://skiingbusiness.com/12513/newswir ... r-lawsuit/